Lease leader Airplane lessor GECAS has taken a disciplined approach to the top By Tim Bader “Our presence in China has been vital in securing more than 190 airplane commitments from airlines in the region. – Norm Liu, GECAS president and chief executive officer PHOTO: GECAS GRAPHIC: (Above) An artist’s concept of a 737 MAX 8 in GECAS livery. GECAS focused on advanced, fuel-efficient airplanes at the 2012 Farnborough International Airshow, with a commitment for 75 737 MAX 8s. BOEING 32 BOEING FRONTIERS / APRIL 2013 The leasing industry is full of compa-nies known by their acronyms rather than their full, formal names. Few, if any, are as recognizable as GECAS. There is a good reason GECAS, or GE Capital Aviation Services, has become a household name in the aviation industry. It is the leasing industry’s largest lessor and lender in size, revenues, income and fleet value. The airplane-leasing and finance company, based in Stamford, Conn., owns and services more than 1,700 airplanes for more than 225 customers worldwide. GECAS obtained the top spot with a disciplined financial and risk-management approach to acquiring and managing airplanes, according to Norm Liu, GECAS president and chief executive officer. “We invest with caution, since there is only so much sensible business in the marketplace today,” said Liu, explaining that GECAS spends approximately $7 billion annually on new airplanes, debt financing and sale-and-leaseback deals. At last year’s Farnborough Airshow in the United Kingdom, GECAS ordered 75 Boeing 737 MAX jets. The MAX, now in development, will have new fuel-efficient engines and other improvements that will save customers money. GECAS has maintained its leadership position despite competition from an increasing number of lessors, especially from Asia. They are attracted to the fast-growing leasing market, which is expected to increase from 38 percent of airplanes in service today to 50 percent by 2020, according to Ascend Online. Bill Collins, vice president for Leasing and Asset Management Sales at Com-mercial Airplanes, said GECAS is unique in that it is a top leasing company but also a leading debt financier with top-tier ratings. And its parent, General Electric, is a major aircraft engine supplier. “GECAS goes beyond just aircraft finance,” Collins said. “It’s a top spare engine lessor and provides consulting services in areas such as airport infra-structure across the globe.” Besides offering a variety of services, GECAS has a worldwide footprint, Liu added, noting airlines prefer local, more personal service rather than drop-by visits. “At our scale we can afford a global presence and have established 25 offices worldwide,” Liu said. “Our presence in China has been vital in securing more than 190 airplane commitments from airlines in the region. Having offices in Africa, Russia and the Middle East helped establish our market leadership in those regions.” But the success of GECAS also is a measure of its experience, Liu said. Few companies can match its 40-plus years in the leasing business. “We have learned lessons when it comes to ordering airplanes and doing sale-leasebacks,” Liu said—lessons that will continue to serve GECAS well in an increasingly competitive market. n tim.s.bader@boeing.com
Frontiers April 2013 Issue
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